GBP/USD: Sterling Takes Off into Four-Year Highs Above $1.3760 as Dollar Sinks Big Time

Sterling is on a roll, up nearly 400 pips in the past four days — every day trader’s dream, right? But can the bullish narrative continue?

🔥 Sterling Breaks Out to Four-Year Highs

• The GBPUSD pair surged past $1.3760 on Thursday, its highest level since October 2021, with sterling now up nearly 400 pips in just four days — a blistering rally for the UK currency amid broad dollar weakness.
• The pound’s ascent comes as traders digest growing speculation that the Fed may shift tone — not just on rates, but on leadership — with the potential early naming of a new central bank boss shaking up dollar flows.
• For bulls, the breakout above $1.3640 — the former three-year high — opens the path toward $1.39 and even $1.40, should momentum continue and the Fed narrative further weakens the greenback.

🚨 Trump’s Fed Comments Stoke Volatility

• Speaking on Wednesday, Donald Trump hinted he could name a replacement for Fed Chair Jay Powell well before the end of his term, which expires in May 2026 — a move that would be highly unorthodox, because the new name is usually dropped three to four months before transition.
• Such an announcement, potentially coming as early as this summer, could allow the “chair-in-waiting” to influence policy expectations, sending ripples across rates and currency markets.
• The dollar index sank to more than three-year lows at 97.60, and with Fed rate cuts still penciled in for the second half of the year, investors are increasingly favoring alternative (not necessarily higher-yielding) currencies like the pound and euro.

💪 Euro Joins the Rally

• The EURUSD shot up to $1.1716, also marking a nearly four-year high, as the common currency logged its sixth consecutive daily gain against the dollar.
• Euro bulls now see potential for a climb toward $1.19, with the double top around $1.17 from late 2021 already cleared in early Thursday trade.
• The broad-based dollar retreat is lifting the entire G10 FX complex, but the pound and euro are leading the charge, powered by the outlook that the new Fed chair will be a lot more loose when it comes to cutting interest rates.